Topic
NCLAT upheld the Swiss Challenge method as a valid share-valuation tool in oppression cases under Sections 241-242 of the Companies Act 2013, stressing that notice must precede any director disqualification and giving family firms way to break deadlocks.
NCLAT rules that parties in oppression and mismanagement proceedings under Section 242(4) of the Companies Act have an absolute right to file a detailed para-wise reply after remand, reinforcing principles of natural justice. The judgment clarifies that this right cannot be denied even if procedural defects exist, ensuring fair adjudication in corporate disputes.
The Supreme Court ruled that a person can qualify as a deemed member under Sections 397-398 of the Companies Act, 1956, even without formal registration, if their financial contribution and the company’s conduct demonstrate a proprietary interest. This expands access to equitable remedies for investors and stakeholders whose rights are ignored through technical non-registration.
NCLAT rules that shareholders who actively consent to private placements or share sales cannot later challenge the same transactions as oppressive under Sections 397-398 of the Companies Act, 1956. The judgment reinforces estoppel as a bar to oppression claims where parties have knowingly participated in the impugned transactions.
The Supreme Court ruled that courts must grant strong interim relief in oppression and mismanagement cases under Section 242 of the Companies Act, 2013, to prevent dissipation of disputed assets until final adjudication. The judgment rejects vague restraints and directs NCLT to dispose of such cases expeditiously, ensuring minority shareholders' rights are protected against prejudicial actions by majority stakeholders.